Investment firms that own businesses can be held accountable for violations of the Dutch Competition Act committed by those businesses, if the investment firms have decisive influence over them. This is one of the conclusions of a decision of the Netherlands Authority for Consumers and Markets (ACM) in the so-called ‘Flour cartel.’ Three investments firms are imposed fines, between 450.000 and 1,5 million euro. This decision marks the first time that ACM fines investment firms.
ACM has previously already imposed fines on various companies that had been directly involved in the flour cartel. Between 2001 and 2007, these flour producers made mutual arrangements in order to keep prices stable. One of these arrangements was a non-aggression pact. In addition, several flour producers bought and subsequently dismantled an old flour mill in the Netherlands in order to reduce total production capacity. These flour producers had a combined market share of approximately 65 percent. At the time, the investment firms that have now been fined successively owned one of the producers involved.
Investment firms usually manage one or more funds. Funds hold shares of businesses, and these shares are usually resold after a while. However, ACM is of the opinion that investment firms, too, can be held responsible for the behavior of the firms they own (through those funds), particularly if the investment firm in question has decisive influence. ACM has concluded that this was the case with the investment firms which have now been fined.